Japanese stocks ended mixed after trading lower for most of the session, helped by a late burst of buying in financials such as Mizuho Financial Group and exporters like Nintendo Co.

"The risk of a recession is increasing. For the rest of the year, most global markets could be testing their lows," said Patrick Shum, strategist at Karl Thomson Securities in Hong Kong. "I think the rebound we saw globally is over."

The Hang Seng Index tumbled 5% to 15,998.30, with selling intensifying in afternoon trading after European markets opened lower. The Hang Seng China Enterprises Index fell 6.4% to 7,894.06.

In Tokyo, the Nikkei 225 Average ended up 1.1% at 9,547.47 earlier, on top of the 14.2% surge it recorded in the previous session. The benchmark fell as low as 9,269.49 earlier in the day, before rebounding in late afternoon trading. The broader Topix index slipped 0.1% to 955.51.

In Mumbai, the Sensitive Index, or Sensex, sank 5.4% to 10,865.33 in afternoon trading.

"There is still a lot of pain in the system. The market is at present like a patient with multiple fractures. A recovery is going to take time," said Devang Shah, vice president for institutional sales at Sushil Finance in Mumbai.

Shah said foreign funds were liquidating positions, but domestic mutual funds weren't facing any significant redemption pressures, as investors were diverting their savings into monthly investment plans with long-term maturities.

Shares of Larsen & Toubro tumbled 9.9% in afternoon trading after the engineering major reported a lower-than-expected 33% increase in fiscal second-quarter net income because of high raw material and financing costs.

Sydney, Shanghai

Elsewhere, Australia's S&P/ASX 200 lost 0.8% to 4,300, New Zealand's NZX 50 index gave up 1.5% to 2,904.64 and South Korea's Kospi dropped 2% to 1,340.28.

China's Shanghai Composite finished 1.1% lower at 1,994.67, after official data released Tuesday showed the growth in the country's M2 money supply -- a broad measure of cash, savings and deposits -- slowed to 15.3% in September from 16% in August.

UOB Kay Hian analyst Irene Gu wrote in a report that the deceleration reflects a "sluggish economy."

"Apart from cutting both [the] reserve ratio and benchmark interest rates, we expect the central bank may release more loans quotas in the coming months to reduce the economic downside risk," Gu added.

Shares of Mazda Motor Corp. (7261) tumbled 9.2% in Tokyo after the Nikkei business daily reported that the company had put on hold plans to build a factory in North America. The delay reflects a slump in new-vehicle sales in the U.S.

Shares of Mizuho Financial Group (8411)
MFG, -1.76%
gained 3.4% and Mitsubishi UFJ Financial Group (8306)
MTU, +0.00%
added 1.4% after the U.S. government detailed a plan to inject $250 billion of capital in banks, including more than $100 million in nine of the largest U.S. banks. See full story.

Energy producers and traders lost ground after November crude-oil futures dropped $2.56 to $78.63 a barrel Monday on the New York Mercantile Exchange. The front-month contract was recently 52 cents lower at $78.11 a barrel in electronic trading.

In Mumbai, shares of Tata Steel tumbled 8.7% in the afternoon after the Mint newspaper reported that a pension fund run by the company's U.K. unit Corus Group had lost 53.52 billion rupees ($1.1 billion) on its exposure to the equity and other financial markets during the April-June quarter and that the losses likely increased since then. The losses came even as Tata Steel said in a statement the report was "speculative." The company added Corus Pension Funds had a surplus in excess of $1 billion as of June 30, and the surplus was estimated to be even higher as of September 30.

Shares of Elpida Memory Inc. (6665) lost 14.5% in Tokyo, a day after it said it was likely to make a 40 billion yen ($396 million) loss for the fiscal first-half ended September.

In Hong Kong, shares of Bank of East Asia (23)
BKEAY, +2.72%
or BEA, ended unchanged in an overall weak market after the government said Tuesday it will guarantee all bank deposits. The announcement follows a run on the bank last month in the wake of rumors that BEA was in financial distress. BEA had denied the speculation.

In Asian currency trading, the U.S. dollar bought 101.79 yen, compared with 102.42 yen late Tuesday.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.